Electronic Signatures: What Is It and Why Businesses Need It?

Electronic Signatures: What Is It and Why Businesses Need It?

Businesses deal with stacks of documents on a daily basis. While staying on top of paperwork keeps a company’s processes organized, it can be tedious and inefficient. In today’s fast-paced business environment, to stay ahead of the competition and be relevant in their respective industries, companies move towards paperless, digital solutions. 

The adoption of digital solutions can simplify and bring more accuracy to business workflows. Fast-growing startups and global companies that employ digital solutions run more efficiently, resulting in increased output, stronger customer relationships, and growth in revenue.

The rise of digital solutions introduced digital tools that streamline operations and promote a high- performing workforce. As businesses implement paperless solutions, electronic signatures became a necessity to eliminate the need for manual signatures and the time-consuming process of signing or collecting signed documents.

An electronic signature is “an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a person with the intent to sign a record” according to the United States Electronic Signatures in Global and National Commerce Act (E-SIGN Act) of 2000. The E-SIGN Act of 2000, as well as the Uniform Electronic Transactions Act (UETA) of 1999, granted electronic signatures the same legal status as a handwritten signature. The E-SIGN Act is a federal act affecting all 50 states. Only 47 states adopted the UETA, as Illinois, New York, and Washington enforce their own bills on the use of electronic signatures.

An electronic signature can be typing or attaching an image of a handwritten signature, clicking on the “Agree” button on digital contracts, using body parts such as fingerprint or face to serve as a biometric signature, and using a Personal Identification Number (PIN). As the name suggests, for a signature to be electronic, one must use a computer or touchscreen device such as a smartphone or tablet.

Eliminating paper in the office is unrealistic, but reducing its use and switching from manual to digital solutions, including electronic signatures, decrease operational costs, strengthen the security of workflows, and let businesses keep pace with today’s digital and fast-paced electronic world.

Electronic signature solutions have been around for several decades now; however, some companies still consider using an electronic signature software quite complex. With proper system integration and implementation procedures, the advantages of electronic signature solutions remarkably surpass the deterrents.

Why do businesses need electronic signatures?

Due to financial risks and the possible disruption in tried-and-tested and established company processes, using new technologies can be complicated and scary, but just like any successful plan, the first few steps will be unstable until one gets the precise rhythm. Thus, disruptive electronic signature solutions continue to change the way many businesses operate since its creation.

      • Seamless signature workflows

Electronic signature solutions make signing and collecting signatures a straightforward process. Unlike manually signing documents that involves printing, signing, and sending documents via postal mail or telefax, using electronic signature solutions lets an individual complete any step in the signature workflows in minutes.

No matter the location, with an appropriate device and stable internet connection, a person can send and collect signatures, as using an electronic signature software makes remote signing possible.

In addition, since saving documents to an electronic signature software is possible, an uninterrupted collaboration between an individual and his or her signatories is manageable. By uploading a document and adding a signature field, where a signatory can sign, one can avoid time-consuming manual processes, including printing and delivering documents. In essence, one can access documents on demand, when he or she needs to.

With lesser or almost no delays, professionals can manage and track signature workflows easier using an electronic signature software.

      • Secure processes

Digital signatures, a type of electronic signature, use Public Key Infrastructure (PKI) technology, a form of online security technology for authenticating users. This innovation restricts unauthorized access to a document and protects it from even the slightest modification.

A handwritten signature is easy to replicate, making a person vulnerable to fraud and identity theft; an electronic signature does not just minimize such risks but also keeps a record of traceable information — including the date and time of signing — and validates the identity of signatories.

In general, providers of electronic signature solutions adhere to the highest levels of data protection and security standards to protect the information of their users and store documents with encryption.

      • Cost savings

Electronic signatures are cost-effective. Unlike the traditional pen-and-paper signing method, which is prone to human errors, electronic signatures lower or nearly eliminate paper, printing, and mailing costs. Errors on printed documents are costly; nevertheless, businesses can do away with such financial consequences by utilizing electronic signature programs.

Primarily, by going paperless, a company can earmark the saved money for operational improvements that have long-term benefits, such as the upgrade of and adoption of new business innovations, expansion of target market reach, employee-centric initiatives, and a more systematic client management approaches.

      • Physical storage space-saving

An office cluttered with documents and filing cabinets decreases productivity and forces spaces to be used as storage areas. An electronic signature software frees up spaces, which companies can turn to collaborative work areas or product storage.

From streamlining workflows, expediting the document signing process, and simplifying the method of signing and obtaining signatures to utilizing a globally-acceptable, higher level of security than traditional signatures, electronic signature solutions enable businesses to attain their goals faster and effectively.

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